- Increased revenues by 20% to a record $595.6 million - Increased EBITDA by 18% to $75.6 million before non-recurring items - Increased pre-tax earnings 17% to $33.7 million before non-recurring items - Increased earnings after tax 11% to $29.2 million before non-recurring items - Completed conversion to corporate structure
MONTREAL, July 29 /CNW Telbec/ - TransForce Inc. (TSX: TFI - T), the leader in the Canadian transportation and logistics industry, today announced significant growth in its key results for the second quarter of 2008, ended June 30.
"Everyone at TransForce can be proud of our performance in the latest quarter," said Alain Bedard, Chairman, President and Chief Executive Officer of TransForce. "The difficulties facing our industry are well known - from rising fuel costs and a high dollar to the slowdown in Canadian manufacturing exports. Despite this challenging economic environment, our people were able to maintain and grow the contribution from existing operations while we added more value for shareholders through acquisitions."
Second Quarter Results: Before Non-Recurring Items
In completing its conversion to a corporate structure on May 14, 2008 and the related termination of its Incentive Plan, TransForce incurred certain one-time expenses in the second quarter totalling $8.7 million pre-tax and $9.9 million after tax. TransForce is now taxed as a corporation. These expenses are discussed in the Company's Q2 08 MD&A. Accordingly, some results from the second quarter of 2008 are reported both before and after including these non-recurring items.
In the quarter, TransForce delivered significant year-over-year increases across key financial performance indicators.
For the three months ended June 30, the Company increased revenues by 20% to a quarterly record of $595.6 million, from $495.7 million in the same period of 2007. This increase was the result of significant acquisitions, which contributed $48.3 million in new revenues. However our existing businesses also grew revenues despite the difficult operating environment.
Before non-recurring items related to the conversion, TransForce increased second quarter EBITDA by 18% to another new record of $75.6 million from $64.1 million a year ago. (EBITDA is earnings before interest, taxes, depreciation and amortization and equivalent to operating income on TransForce's financial statements). The record high EBITDA was also the result of both acquisitions and organic growth.
TransForce increased earnings both before and after taxes, in the second quarter. Earnings before taxes rose by 17% to $33.7 million from $28.7 million a year earlier. Earnings after taxes increased by 11% to $29.2 million from $26.3 million in the second quarter of 2007.
In the second quarter, TransForce increased earnings per share from continuing operations, excluding non-recurring items, to $0.34 per share from $0.31 per share a year earlier.
"At a time when many businesses have been shrinking due to low demand, we are very pleased to be able to report record revenues and strong bottom line growth in the second quarter," said Mr. Bedard. "Acquisitions contributed to our growth as expected from our established strategy. But what is remarkable is that our existing businesses were able to generate growth. Our Package and Courier segment was particularly strong as was the Specialized Services segment."
Mr. Bedard added: "The strong results generated for shareholders in the latest quarter are the direct result of TransForce's ability to align technology, efficient processes, and the extraordinary efforts and discipline of our management and employees in the face of the most difficult conditions our industry has faced in many years. I have always said we have some of the best people in our industry. It is when times are tough that the best prove themselves. On behalf of the Board and TransForce shareholders, I thank the people of TransForce for their outstanding work."
Second Quarter Results: After Non-Recurring Items
Including non-recurring items related to the conversion, quarterly EBITDA increased to $66.9 million from $64.1 million a year earlier. Second quarter earnings, before taxes, were $24.9 million compared with $28.7 million in the same quarter of 2007. Earnings after taxes were $19.3 million compared with $26.3 million in the same quarter last year. Second quarter earnings per share from continuing operations were $0.22 compared with $0.31 a year ago.
Year-to-Date Results: Before Non-Recurring Items
While industry conditions were more difficult in the first half of 2008 than a year earlier, TransForce improved it key performance measures in the first six months of this year.
TransForce increased revenues in the first half of 2008 by 16.8% to $1.1 billion from $960.4 million in the first half of 2007.
Excluding non-recurring items, the Company also increased EBITDA to $132.5 million in the first six months, up by 13.4% from $116.8 million in the first half of 2007.
Earnings before taxes increased by 3.4% to $51.1 million for the first half of the year from $49.4 million a year ago. Earnings after taxes also increased by 2.4% to $48.3 million from $47.2 million for the first half of last year.
Earnings per share totaled $0.56 in 2008 compared with $0.55 per share in 2007.
Year-to-Date Results: After Non-Recurring Items
EBITDA, including non-recurring items, increased by 6% to $123.8 million in the first half of this year, from $116.8 million a year ago. Earnings before taxes for the first half of 2008 were $42.4 million, compared with $49.4 million for the first six months of 2007. Earnings after taxes for the first two quarters of 2008 were $38.4 million compared with $47.2 million in the same period of 2007. First-half earnings per share were $0.45 per share, compared with $0.55 per share during the same period of 2007.
"Despite our strong results in the second quarter and first half of 2008, we expect economic and business conditions to remain difficult for the rest of the year," said Mr. Bedard. "We will remain focused on maintaining our discipline on costs and efficiency. Overall growth will come from acquisitions. We continue to explore strategic acquisition opportunities and will likely have more to announce before the end of the year."
Dividend
TransForce's Board of Directors has declared today an interim dividend of $0.05 per share that will be paid on August 15, 2008 to shareholders of record at the close of business on August 7, 2008. The amount of this dividend is half of the proposed regular quarterly dividend. This reflects the timing of TransForce's conversion to a corporation in the middle of the second quarter of 2008.
The Board has also declared today its regular quarterly dividend in the amount of $0.10 per share that will be paid on October 15, 2008, to shareholders of record at the close of business on September 30, 2008.
Management Conference Call
TransForce will host a conference call for investors to discuss the results of the second quarter later today, July 30, 2008 at 9:00 a.m. Eastern Time. Participating from the Company will be Alain Bedard, Chairman, President and Chief Executive Officer, and Salvatore Vitale, Chief Financial Officer.
To participate in the conference call, investors are invited to call 1-800-952-1797 A recording of the call will be available until midnight August 6, 2008, by dialing 1-800-558-5253 or 416-626-4100 and entering passcode 21389118.
Financial Statements
The financial statements for the periods ended June 30, 2008 and 2007 included below are an integral part of this news release.
Profile
TransForce Inc. (www.transforce.ca) is the leader in Canada's transportation and logistics industry. Headquartered in Montreal, Quebec, TransForce creates value for shareholders through managing and investing in a growing network of wholly-owned, operating subsidiaries. TransForce provides a comprehensive and unique combination of capabilities, resources and geographical coverage in both domestic and trans-border markets. Its companies currently operate in five well-defined business segments:
- Less Than Truckload;
- Package and Courier;
- Specialized Services, which includes its ancillary transportation
services such as logistics, warehousing & dedicated services, fleet
management & personnel services; oilfield & oilsand services, and;
waste management;
- Specialized Truckload; and
- Truckload.
TransForce shares (TFI - T) are listed on the Toronto Stock Exchange.
Forward-Looking Statements
Except for historical information provided herein, this press release may
contain information and statements of a forward-looking nature concerning the
future performance of TransForce. These statements are based on suppositions
and uncertainties as well as on management's best possible evaluation of
future events. Such factors may include, without excluding other
considerations, fluctuations in quarterly results, evolution in customer
demand for TransForce's products and services, the impact of price pressures
exerted by competitors, and general market trends or economic changes. As a
result, readers are advised that actual results may differ from expected
results.
For further details, please see the Financial Statements below. The
Financial Statements and Management's Discussion and Analysis can also be
found on SEDAR at www.sedar.com and on the Company's website
www.transforce.ca.
CONSOLIDATED
STATEMENTS
OF INCOME
(unaudited)
(In thousands Three months Three months Six months Six months
of dollars, ended ended ended ended
except per
share or June 30, June 30, June 30, June 30,
unit amounts) 2008 2007 2008 2007
Revenues 514,081 450,125 983,591 877,122
Fuel surcharge
revenues 81,560 45,527 138,308 83,288
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Total revenues 595,641 495,652 1,121,899 960,410
Expenses
Operating expenses 432,511 353,567 819,198 686,388
Fixed costs,
general and
administrative
expenses 88,795 75,470 170,040 152,223
Incentive plan 7,438 2,496 8,885 4,992
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Operating income
before the following: 66,897 64,119 123,776 116,807
Depreciation of
fixed assets 26,767 24,642 51,820 47,455
Amortization of
intangible assets 3,906 2,841 7,927 5,459
Interest on
long-term debt 11,765 8,644 23,205 15,726
Gain on disposal
of fixed assets (477) (673) (1,528) (1,241)
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Income before
provision for
income taxes 24,936 28,665 42,352 49,408
Provision for
income taxes
Current 2,544 2,806 4,354 5,326
Future 3,108 (442) (380) (3,082)
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5,652 2,364 3,974 2,244
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Net income 19,284 26,301 38,378 47,164
Earnings per share
Basic 0.22 0.31 0.45 0.55
Diluted 0.22 0.31 0.45 0.55
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Outstanding weighted
average number of
Shares 40,056,967 - 20,139,139 -
Units 38,864,714 72,174,911 55,429,540 72,251,410
Tracking shares 7,412,309 13,765,854 10,571,461 13,766,084
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Total 86,333,990 85,940,765 86,140,140 86,017,494
-------------------------------------------------------------------------
Shares outstanding
Number of shares 86,790,097 - 86,790,097 -
Number of units - 73,024,381 - 73,024,381
Number of
tracking shares - 13,765,716 - 13,765,716
-------------------------------------------------------------------------
Total 86,790,097 86,790,097 86,790,097 86,790,097
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CONSOLIDATED
BALANCE SHEETS As at As at
(in thousands of dollars) June 30, December 31,
2008 2007
(unaudited) (audited)
ASSETS
Current assets
Accounts receivable 347,100 288,126
Inventories 10,804 9,970
Prepaid expenses 20,480 11,872
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378,384 309,968
-------------------------------------------------------------------------
Fixed assets 690,971 649,348
Goodwill 428,685 399,828
Intangible assets 79,673 68,619
Other assets 6,500 6,238
Future income taxes 8,540 8,540
-------------------------------------------------------------------------
1,592,753 1,442,541
-------------------------------------------------------------------------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities
Bank indebtedness 19,564 9,081
Accounts payable and accrued liabilities 227,640 204,907
Cash distributions payable to unitholders - 9,675
Dividends payable on Tracking Share of
TFI Holdings Inc. 571 2,191
Income taxes payable 5,168 5,721
Current portion of long-term debt 55,783 35,003
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308,726 266,578
-------------------------------------------------------------------------
Long-term debt 752,883 651,636
Non-controlling interest - 2,562
Asset retirement obligations 6,372 5,521
Future income taxes 34,524 23,737
Equity
Share Capital 519,404 -
Capital contributions and Tracking Shares - 519,404
Units held by the fund for long-term
incentive plan - (11,751)
Deficit (29,156) (15,146)
-------------------------------------------------------------------------
490,248 492,507
-------------------------------------------------------------------------
1,592,753 1,442,541
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CONSOLIDATED
STATEMENTS OF
RETAINED
EARNINGS Three months Three months Six months Six months
(DEFICIT) ended ended ended ended
(unaudited)
(in thousands June 30, June 30, June 30, June 30,
of dollars) 2008 2007 2008 2007
Retained
earnings
(Deficit),
beginning
of period (29,245) 59,677 (15,146) 70,646
Net income
for the period 19,284 26,301 38,378 47,164
Distributions to
unitholders (14,514) (29,027) (43,541) (57,324)
Dividends on
Tracking Share
Units of TFI
Holdings Inc. (1,860) (3,626) (5,581) (7,161)
Incentive plan
contribution (2,821) - (3,266) -
-------------------------------------------------------------------------
Retained earnings
(Deficit),
end of period (29,156) 53,325 (29,156) 53,325
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CONSOLIDATED
STATEMENTS OF
CASH FLOWS Three months Three months Six months Six months
(unaudited) ended ended ended ended
(in thousands June 30, June 30, June 30, June 30,
of dollars) 2008 2007 2008 2007
CASH FLOW FROM
OPERATING
ACTIVITIES
Net income
for the period 19,284 26,301 38,378 47,164
Non-cash items:
Depreciation
of fixed assets 26,767 24,642 51,820 47,455
Amortization of
intangible assets 3,906 2,841 7,927 5,459
Incentive
plan expense 7,438 2,496 8,885 4,992
Purchase of
units held
by the entity
for the
Incentive plan (400) (3,319) (400) (3,998)
Deferred
financing charges 330 160 564 310
Future income taxes 3,108 (442) (380) (3,082)
Gain on disposal
of fixed assets (477) (673) (1,528) (1,241)
Other 77 160 516 240
-------------------------------------------------------------------------
60,033 52,166 105,782 97,299
Net change in
non-cash
working capital
balances related
to operations (10,571) (2,749) (46,827) (12,949)
-------------------------------------------------------------------------
49,462 49,417 58,955 84,350
-------------------------------------------------------------------------
CASH FLOW FROM
FINANCING
ACTIVITIES
Increase (decrease)
in bank advances
and overdraft 4,377 (8,736) 10,483 (8,285)
Increase in
long-term debt 97,928 - 97,928 556
Repayment of
long-term debt (12,841) (22,082) (38,187) (30,885)
Increase (decrease)
in long term
revolver facility (82,016) 62,900 9,833 153,400
Cash distributions
paid to unitholders (24,189) (29,027) (53,216) (56,959)
Distributions paid
on Tracking
Share Units (2,798) (3,358) (7,201) (7,640)
-------------------------------------------------------------------------
(19,539) (303) 19,640 50,187
-------------------------------------------------------------------------
CASH FLOW FROM
INVESTING ACTIVITIES
Additions to
fixed assets (22,546) (18,793) (35,676) (78,868)
Proceeds from
disposal of
fixed assets 3,659 5,064 11,139 9,988
Business acquisitions
(including bank
advances net
of cash) (10,840) (35,709) (53,989) (66,635)
Other assets, net (196) 324 (69) 978
-------------------------------------------------------------------------
(29,923) (49,114) (78,595) (134,537)
-------------------------------------------------------------------------
Net change in cash
and cash equivalent
during the period - - - -
-------------------------------------------------------------------------
Cash and cash
equivalent,
beginning of the period - - - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash and cash equivalent,
end of the period - - - -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplemental cash
flow information:
Cash paid during
the period for:
Interest 11,157 8,555 22,601 15,610
Income taxes - 2,534 4,022 5,926
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%SEDAR: 00026947EF